[throw0101a]

For CAD-USD exchanges, Norbert's gambit is a popular procedure:

> Here’s how you can use this ETF to exchange $10,000 Canadian:

> 1. Get a quote for DLR and calculate how many shares you can buy for $10,000 Canadian.

> 2. Place an order for that number of shares. The trade will settle in Canadian dollars.

> 3. Call your discount brokerage’s customer service desk and ask them to take your DLR shares and “journal them over” to the U.S. dollar side of your account, where they should show up as DLR.U.

> 4. Place an order to sell all of your DLR.U shares. The trade will settle in U.S. dollars.

* https://www.moneysense.ca/magazine-archive/norberts-gambit-a...

* https://www.finiki.org/wiki/Norbert%27s_gambit

* https://canadiancouchpotato.com/2013/12/03/norberts-gambit-t...

Technically this would work with any interlisted stock, though the DLR ETF is very popular for this because of its liquidity. One could probably find stocks for GBP and EUR as well:

* https://www.tmxmoney.com/en/research/interlisted.html

The overhead of the exchange is the cost of buying/selling the stock, which is fixed price, so it it's not like a percentage cut.

[jannes]

Depending on where you live this could make your tax declaration more complicated, which could require the services of a tax consultant if you don't know how to do it yourself... Just something to keep in mind if you want to save money.

[cik]

This is exactly how I transfer money between the US and Canada. Outside of Corona, it's easy to minimize this impact by choosing either bank stocks or indexes, and always after 1045 EST when the market jitter is done ~90% of the time.

[Scoundreller]

> Technically this would work with any interlisted stock, though the DLR ETF is very popular for this because of its liquidity.

An interlisted bank/telecom stock has far more liquidity than DLR does.

This is a bit of a problem because you’ll pay at least half a cent or a cent in spread for your purchase and sale to the market makers. This adds up a lot more quickly on a $10 DLR than a $100 bank stock that’s liquid enough to have the same spread.

A 1cent spread costs you 0.1% for the buy and then again for the sale on DLR. On a $100 stock, it’s 0.01%.

DLR’s advantage is that it isn’t volatile because it only holds dollars and nothing else.

If you use a bank stock, the advantage is that you’re “in the market” during the duration of your trade. On average, that’s a plus, but you could lose/gain a few percent in the time it takes to journal.

The other disadvantage of DLR is that it does have a management fee. You shouldn’t hold it for long periods, but it’s another mark against DLR.